No, it is definitely not dead. There are some terrific Prog Bands releasing fantastic albums. Sure prog moved from the centre--okay, just a bit right of centre--after the 70s, but there is a tremendous creative output in this style. The best of the best in recent years (my opinion) are Porcupine Tree, The Psychedelic Ensemble, and Riverside. The most original and best album I heard this year came from The Psychedelic Ensemble---The Art of Madness. Right up there with the albums of old---Yes, King Crimson, ELP, and the others from that generation. Ozric Tentacles has a new release too that is absolutely wow----Yum Yum Tree. Riverside is a close second to The Psych Ens. I find new stuff on Prog Rock Radio and Prog Archives.
Happy listening!